ENTREPRENEURSHIP DEVELOPMENT AND EMPLOYMENT GENERATION
IN NIGERIA: A STUDY OF THE NATIONAL DIRECTORATE OF EMPLOYMENT
John N.N Ugoani
College of Management and Social Sciences, Nigeria
E-mail: drjohnugoani@yahoo.com
Grace I. Ibeenwo
Akanu Ibiam Federal Polytechnic Unwana, Nigeria
E-mail: gracyibeenwo@yahoo.com
Submission: 04/03/2015
Revision: 17/03/2015
Accept: 22/03/2015
ABSTRACT
The
issues of entrepreneurship development and employment generation continue to
receive high attention because of their impact on unemployment and poverty
reduction in many parts of the world. The National Directorate of Employment
was introduced by government in its efforts toward employment generation. In
furtherance of attempts toward tackling unemployment, addressing issues of
poverty and vulnerability and promoting inclusive finance at the grass-root
levels, the Directorate has a Special Micro Empowerment Scheme, which is aimed
at promoting social inclusion and job creation. Micro, Small and Medium
enterprises such as water/beverage
sales, shoemaking, shining, among other vocations account for about 99.6
percent of registered businesses in Nigeria by which about 63 percent of the
labour force earn a living. The Directorate has created over 2.076 million
employments since it was established. The NDEs one million job creation
programme remains a wonderful idea in employment generation. The survey
research method was used for the study. Surveys refer to an investigation of
events that exist at the time of the research and connected with some problem
situations that is felt over a wide area. Data analysis was done through
Pearson’s techniques. The result showed a very strong positive correlation
between entrepreneurship development and employment generation. This is the aim of the study.
Keywords: Unemployment,
Poverty, Shoemaking, Sure-P, Innovation, Chukwuma committee, Wonderful idea,
Growth and Employment strategy, ILO, UNIDO.
1. INTRODUCTION
The
economic and social development of any nation depends to a large extent on the emergency
of a strong and vibrant private sector driven by entrepreneurship. The believe
in this fact has spurned several initiatives by government to foster the
creation of more micro, small and medium enterprises (MSMEs), strengthen the
management capacity of the existing institutions and working out some
modalities to provide easy access to capital for entrepreneurship development.
One of the important agencies created by government to encourage
entrepreneurship and create more employment is the National Directorate of
Employment (NDE).
The
programme believes that the ebb and flow of any meaningful business enterprise
is usually highly dependent on the resilience of entrepreneurial activity often
measured by an extraordinary predisposition to business venturing, the
manifestation of high spirit for exceptional financial risk appetite, and a
natural interest to the pursuit of productive investment. In Schumpeter’s
(1952) view in (AKANWA, 2006), innovation is the basis of entrepreneurship.
Innovation
includes the doing of new things and the doing of things that are already being
done in a new way. He developed his concept which is now elevated to a school
of thought. This school believes in two things – entrepreneurial role, and
managerial role. The entrepreneurial role involves making strategically
important and innovative decisions; managerial role involves maintaining
routine operations of the enterprise.
Fortunately,
this coincides with the contemporary view regarding an entrepreneur as a person
who makes strategic and innovative decisions in the day-to-day management of a
business. Consequently, the theory of profitability has often been used to
explain entrepreneurship earnings (AKANWA; AGU, 2005, DEBELAK, 2006).
Entrepreneurship
is the process of creating value by pulling together a unique package of
resources to exploit an opportunity. Because the entrepreneur never controls
all the necessary resources, pursuing the opportunity requires bridging the
resource gap. Such a process requires a series of choices, which must
be made in a manner, which is both internally consistent and
externally appropriate to the market. Since the market drives entrepreneurship,
the entrepreneurship can therefore be seen as a catalyst that is highly
innovative along with market needs.
In
doing so, the entrepreneur must translate careful choices into economic
performance, deal with the problems that arise as the enterprise grows, and
decide when to harvest the venture. The entrepreneur must carefully plan and
then gradually implement the process (HOFER; CHARAN, 1984). In an emerging
market like Nigeria, a focus on entrepreneurs, entrepreneurship and the
enterprise is critical within the important context of the necessary
programming for sustainable human development and the creation of employment
(MATANMI, 2006).
Entrepreneurship
is directly linked to employment because it is a unique process that creates
opportunities of employment. Employment as the word implies means to give work
to somebody, usually for payment. To this extent therefore, employment is an
act of employing somebody for a wage or payment for his services. Employment
also implies those people who are engaged either permanently or temporarily in
a productive venture for a payment. The payment may be daily, hourly, weekly or
monthly.
In
contrast, unemployment is a situation in which some people who are qualified,
ready, willing and able to work do not find work to do. It is also a situation
where some people who fall within the ages of the working population, capable
and willing to work are unable to secure befitting jobs to do. Since
unemployment constitutes one of the problems facing many nations, especially
the developing nations like Nigeria, governments tend to focus much attention
on programmes and methods of combating it (UWAZIE, 2006).
The
Federal Government of Nigeria (FGN) launched the NDE programme in 1986 as a
bold strategy for dealing with mass unemployment. The programme has four core
components including: National Youth Employment and Vocational Skills
Development Programme, Small Scale Industries and Graduate Employment
Programme, Agricultural Sector Employment Programme and Special Public Works
Programme.
These
were created to take care of the majority of Nigerian Youths who have no productive
and marketable skills. Since Nigeria is supposedly an agrarian based economy,
the agricultural sector employment programme of NDE is designed for graduates
of agricultural discipline who are interested in self-employment in
agriculture. The programme is executed in collaboration with state governments.
According to NDE (1986), the state provides about 500 hecters of farmland for
the programme each year. After the necessary screening of applicants, the NDE
places 100 or more graduate candidates as participants in the scheme.
Each
participant is given 5 hecters of cleared farmland and a certain loan amount to
start, through which the NDE seeks to promote micro, small and medium
enterprises, vocational skills development, promote rural employment, among
other entrepreneurship activities. All over the globe, a major problem of the
entrepreneur and an obstacle to entrepreneurship process has often been lack of
access to finance for entrepreneurship development. According to the World Bank
(2009), many middle-class people in poor countries are entrepreneurial, most
run small-scale business with few asset.
Family
members supply labour, paid staff are few. Obtaining start up finance is not
always simple or easy, however, even for successful entrepreneurs. Business
loan application can be onerous, often requiring detailed financial projections
and business plans. Proof of employment, letters of reference, or other
documents are required in countries like Nigeria, Liberia and Zambia. New
entrepreneurs and small enterprises typically lack the expertise to prepare
detailed business plans and are frequently unable to access credit through the
traditional financial institutions.
The
NDE perspective did not take cognizance of the fact that there may not be any
reasonable entrepreneurship and employment generation without adequate finance.
For example, at the inception of the NDE, a loan of N11500.00 was approved for
those going into crop farming. Out of the loan, the sum of N7325.00 was paid
out to the supplier of seeds, farm implements, pesticides, fertilizers, storage
crops and land preparation.
The
remaining N4175 was for wages of the farmland and the participant’s monthly
stipend of N150. The NDE strategy in this way never helped in entrepreneurship
and employment generation. This situation has resulted into the establishment
of other schemes like the micro small and medium enterprises scheme, small and
medium enterprises development agency of Nigeria, to drive entrepreneurship
development (ED) and employment generation (EG) in Nigeria.
Otti
(2014) reports that Anyaoku, while bemoaning the high unemployment rate among
youths in the country describes it as a big drain on national economy, and
stressed the need for entrepreneurship among youths. Entrepreneurship is a
process of innovation that discovers new and more valuable combinations of resources,
which result to the exploitation of profitable business opportunities and the
creation of employment.
Nigeria
today needs young graduates that are entrepreneurially bent to float businesses
based on their specific knowledge of time and place. For example, graduates of
Agriculture should be able to come up with business ideas to float
entrepreneurial businesses that would create jobs in animal husbandry and
dairying, fisheries, horticulture and allied sectors.
Also,
graduates of finance and accounting should be able to generate ideas for
entrepreneurial ventures that would solve multiple financial problems, such as
reliable and integrated credit information database. In the same vein,
professions like medicine, engineering, architecture, insurance, pharmacy, real
estate, etc. are all yearning for knowledgeable entrepreneurship development.
What is needed is necessary entrepreneurial spirit among youths to save them from
the debilitating frustration of unemployment (ISIMOYA, 2012).
Aganga,
(2012) hints that Nigeria is encouraging entrepreneurship development through
micro, small and medium enterprises (MSMEs). He says: “We have since the
beginning of this administration strategically positioned small businesses to
drive the economy. The recent data undertaken by the Small and Medium
Enterprises Development Agency of Nigeria (SMEDAN) and the National Bureau of
Statistics (NBS) put the micro, small and medium businesses in the region of
17.3 million across the country with total employment in the sector put at
about 32million and contribution of about 45 percent to the GDP.
“We
have a market with 167 million people. In fact, the strategy for job creation
in most developed economies is based on the SME sector. He assures that
assuming that if only half of the 17.3m MSMEs create a job each every year that
is about 8 million “That is why developed and developing economies are basing
their plan on SMEs. According to Aganga (2012), the country has also developed
a new SME policy. He alerts that one of the major challenges confronting small
and growing businesses (SGBs) is access to competitive market both locally,
regionally and internationally and that a new impetus must be generated to
expand SGBs horizon.
He
opines that for the SGBs or MSMEs the mentality has to change from starting a
business to growing a business, like Bill Gates, Aliko Dangote, and others who
started small and expanding because they have a vision. To provide finance for
entrepreneurship development the Central Bank of Nigeria (CBN) says it will set
aside N600billion for onward lending to small holder farmers as financial
inclusion strategy that aims to ensure that a clear agenda is set for
increasing both access to and use of financial services within the defined
timeline which is by 2020. The fund will be disbursed through Micro Finance
Banks (MFBs).
MFBs
being a subsector that is close to the primary producers, processors and
distributors of agricultural products are recognized to participate in the
distribution of founds to MSMEs against the often unwillingness of the
conventional banks to support entrepreneurship. The MFBs will collaborate with
the Nigeria Incentive Based Risk Sharing System for Agricultural Lending
(NIRSAL) for easy access to entrepreneurship credit. NIRSAL offers three main
products for the development of entrepreneurship in the agricultural sector.
First,
it offers credit risk guarantees for loans and credits issues by a range of
financial services providers to participants in the agribusiness value chain.
Its guarantees cover between 30 to 70 percent of loan exposure for activities
related to crop, livestock and aquaculture production, processing and
distribution. It has no limit on the size and duration of the guarantee, and
can also take foreign currency based risks via swap arrangements.
Secondly,
it offers strategic investment advice to value chain participants and local
state and federal governments. Such advice includes how to make the local
market more investment friendly, improve key infrastructure, and drive
job/wealth creation using agribusiness. And thirdly, financial and structuring
advice to investors and value chain stakeholders seeking a particular value
chain such as cassava chip export or rice production. (MOSES-ASHIKE, 2012).
Over
1.4m jobs were created through MSMEs in 2012, according the Small and Medium
Enterprises Development of Nigeria (SMEDAN) (AGBOOLA, 2012). According to
Afolabi (2014) in the last five years, the MSMEs sector accounted for about
99.6 percent of the registered businesses in the country by which 65 percent of
the labour force earn a living. About 35.7 percent of the total sales and value
added in the manufacturing sector also come from MSMEs as well. Thus,
entrepreneurship, through MSMEs, contributes to the creation of wealth,
employment and income generation, both in rural and urban areas, and ensuring a
more equitable income distribution.
They
also provide the economy with a continuous supply of ideas, skills and
innovations necessary to promote competition and the efficient allocation of
scarce resources. Despite theories and practical development of indigenous
MSMEs and governmental policies and programmes on entrepreneurship, resulting
in frequent improvements, changes, and modifications of programme, the broad
objective of reducing unemployment through entrepreneurship is yet to be
achieved. It would appear that interested stakeholders efforts could not
produce effective result due to lack of disciplined behaviour by entrepreneurs
and officials charged with the execution of government entrepreneurial
assistance programmes. The missing link is general lack of business ethics (OGUNDELE.
2006) Snyder, et al, 1983, Stevenson and Gumpert, 1985 Leap Africa, 2006).
To
address the issue of unemployment government plans to create 5m jobs by 2015
through the National Enterprises Development Programme (NEDEP) and the Nigerian
Industrial Revolution Plan (NIRP). The aims of the programmes will be
actualized through the establishment of micro, small and medium enterprises in
the 774 local government areas based on comparative and competitive advantages.
NEDEP was developed with the objective of addressing the major challenges
militating against MSMEs growth and development across the country to generate
employment (MASARI, 2014).
According
to Aganga (2013), the Ministry of Industry Trade and Investment through SMEDAN
processed over 1000 business plans by various MSMEs co-operatives across the
country for funding adding that the target was to process about 10,000 business
plans from MSME co-operatives in 2013 as employment generation strategy. Lack
of employable skills is a major contributing variable to the problem of
unemployment in all parts of the world and especially in Nigeria.
The
issue is compounded because the educational system run in the country places
emphasis on liberal education rather than acquisition of vocational skills,
which would prepare individuals for entrepreneurship ventures that, would help
in self-employment and employment generation generally.
Consequently
in frantic efforts to seek a way out of the problem the Federal Government
constituted the Chukwuma Committee in 1986 to consider appropriate strategies
for dealing with mass unemployment problem in the country under the Ministry of
Employment Labour and Productivity and the work of the Chukwuma Committee,
among others gave birth to the NDE. Between 1987 and 1996, about 1.90m
Nigerians benefited from the NDE skills acquisition, skills that helped in
entrepreneurship development and employment generation (ADEBISI; ONI, 2012, NZENWA,
2000, ADAMS, et al, 2011, NDUJIHE, 2015).
1.1 Statement of the problem
The
National Directorate of Employment as a mechanism for entrepreneurship
development and employment generation appears to focus more on youth-oriented
activities. Especially there is high emphasis on skill acquisition centres.
While these are important for entrepreneurship growth, it offers little
opportunities for employment generation in view of Nigeria’s population density
and the few members of people engaged in NDE centers.
The
NDE has no serious arrangement for the finance of start-up and even existing
entrepreneurial activities such that would ensure their sustainability and
capacity to generate employment. The provision of paltry loans for participants
in its agricultural activities manifested more in such farms being over grown
by weeds and even taking over the farmers inside the farms, instead, due to
lack of adequate finance to prosecute the business. Unemployment rate continues
to rise in the country.
Osehobo
(2012) reports the minister of youth’s development as declaring that about
67million youths were certified jobless, of the figure, 80 percent do not possess
university degrees. The minister attributes the high rate of unemployment to
years of failure at different levels, explaining that “lack of job is a
consequence of lack of skills”. And to bridge the skills gap the NDE through
its training programmes seeks to equip participants with the necessary
competencies for self-employment and other opportunities.
Despite
the existence of different programmes in addition to the NDE, finance remains a
major problem of entrepreneurship development in Nigeria. To minimize the
problem, each state of the federation has approval to access N2bn from the CBN
through the Micro, Small and Medium Enterprise Development Fund (MSMEDF). This
is based on the fact that for any economy to grow, it must be private sector
based and driven by MSMEs, which are more active in the economic development of
any country (OTABOR, 2014) The NDE seeks to reduce youth unemployment as the
issue is a subject that is common in Nigeria and statistics show that about
300000 Nigerians graduate from tertiary institutions yearly into the labour
market with little or no job opportunities (ONYEKAKEYA, 2014, OKOJIE, 2011).
1.2 Objective of the Study
The
study was designed to explore the relationship between entrepreneurial
development and employment generation in view of the importance of the
variables in the economy of any country.
1.3 Delimitation of the study
The
study was delimited to a cross-section of the population in Aba, Nigeria. The
choice of Aba is unique in view of the high number of entrepreneurs in the
city.
1.4 Significance of the study
The
study will provide insights on entrepreneurship development programmes in
Nigeria and particularly the workings of the NDE. Students, researchers and the
several public may find such information helpful.
1.5 Limitation of the study
The
study was acutely constrained by lack of any research grant window.
1.6 Hypotheses
To
achieve the objective of the study, two hypotheses were formulated and tested
at 0.05 level of significance.
Ho:
There is no relationship between entrepreneurship development and employment
generation.
Hi:
There is a relationship between entrepreneurship development and employment
generation.
2.
LITERATURE REVIEW
The
National Directorate of Employment is one of the Federal Government’s effort
towards encouraging the survival and development of small-scale businesses. The
programme is especially charged with provision of skills and loans to enable
young graduates establish their own businesses. The programme sparked off the
highest number of small-scale businesses throughout the country. Under the
programme, the small business owners enjoy low taxes, free technical advice and
other support services provided by the Federal Government to enhance employment
generation. (OKENWA, 1999).
According
to Adebisi and Oni (2012), the philosophy of the NDE is self-enterprise, which
emphasizes self-employment and self-reliance in preference to wage employment.
This philosophy is pursued through policy planning and well-articulated
programmes of Rural Employment Promotion (REP), Vocational Skills Development
Programme (USD), Special Public Work Programme (SPWP), and Small Scale
Enterprise Programme (SSE).
These
programmes are set up across the nation in an effort to alleviate unemployment
problems in the nation. The NDE does not leave the disabled out of its
programmes. The disabled work scheme is designed to enable the disabled acquire
skills, produce marketable products that will keep them gainfully employed.
2.1 Four major NDE Programmes
The
four major vehicles of the NDE programme are (a) National Youth Employment and
Vocational Skills Development Programme (b) Small Scale Industries and Graduate
Employment Programme, (c) Agricultural Sector Employment Programme and (d)
Special Public Works Programme.
a) National Youth Employment and Vocational
Skills Development Programme.
This
programme takes care of the majority of Nigerian Youths who have no productive
and marketable skills. The programme is run through the national open
apprenticeship scheme, waste to wealth scheme, schools on wheels scheme and
disabled work scheme. Under the programme the participants are required to
register with the Federal Ministry of Employment, Labour and Productivity’s
local labour exchanges before being accepted as trainees when they have
completed their period of apprenticeship thereby acquiring the necessary
skills, they become potential candidates for employer’s consideration and
absorption. Alternatively, those who can go into self-employment are encouraged
to do so.
b)
Small Scale Industries and Graduate Employment Programme
The
SSIGEP is designed by NDE to assist the unemployed people set-up their own
businesses. This is done after it has conducted courses in entrepreneurship and
its job creation loan scheme. The participant is required to submit a
feasibility study of the intended venture, which is studied by a bank. The loan
for the venture where given by a bank is collateralized by the applicants’
degree certificates and guaranteed by NDE.
Such
loan is repayable within a period of 5years at an interest rate determined by
the Central Bank of Nigeria. The NDE is disposed to such small businesses as
candle making, soap and detergent making, restaurants, agricultural production.
Refuse collection, printing and publishing, fashion designing, textiles and
garment making, among others.
c)
Agricultural Sector Employment Programme
This
programme is designed to provide self-employment in the agricultural sector.
The ASEP is run in collaboration with state governments who provide the land.
Applicants registered for this programme is allocated 5 hecters of cleared
farmland to take off and with an agreed amount of loan. This is an important
component of the NDE programme.
According
to Olayinka, (2014) NDE says it will establish one agricultural park each in
the Northern and Southern parts of the country to generate employment in the
agricultural sector. According to NDE, it has empowered a total of number of
177,168 participants in the last two years. The timeframe, which covers the
entire 2013 up to September, 2014 shows that 48,558 persons benefitted from the
training in vocational skills development while public works and
community/technical skills development attracted 460 persons 2,900 benefitted
from the agricultural skills and rural development, and 26102 benefitted from
the entrepreneurial/business skill development, graduate transient job creation
attracted 6,880 persons while 271 enrolled for the enterprises created by
graduates and artisans.
14800
participants took part in its micro enterprises enhancement scheme while women
and vulnerable empowerment scheme attracted 1105 and employment counselling and
job linkages recorded 76,092 participants. In furtherance of its efforts
towards tackling unemployment, addressing issues of poverty and vulnerability
and promoting inclusive finance at the grassroots levels the NDE has a new
Scheme called Special Micro Empowerment Scheme (SMES) which is aimed at
promoting social inclusion and job creation.
Basically,
the new scheme seeks to assist the poor and vulnerable persons (petty traders,
artisans, women, widows, orphans, internally displaced persons, physically
challenged persons, etc.) and establish/manage or boost their own micro
enterprises. The micro enterprises being promoted includes: shoemaking,
vegetable oil extraction, water/beverage sales, potatoes/plantain frying, among
others. The NDE lists low funding level as a major stumbling block as it
affects the capacity building for personnel, curtail programme expansion for
full capacity utilization, restrain capacity building for skills acquisition
training centres through facility upgrading to meet international standards.
d)
Special Public Works Programme
This
programme seeks to give temporary employment to a pool of the unemployed in
maintaining public work. The state governments in collaboration with the NDE
identify projects to which participants are deployed. These include:
construction and maintenance of roads, buildings and other infrastructure, tree
planting, environmental sanitation, land clearing and other farm support
services.
2.2 NDE Training Component
According
to Adebisi and Oni (2012), the core issue in providing relevant training is to
identify what the real training needs are. Therefore, to make training count it
must be related directly to the needs of the people. They opine that an
important characteristic of technical and vocational education is that it can
be delivered at different levels of sophistication. This presupposes that
technical and vocational education institutions can respond to the different
socio-economic and academic backgrounds and prepare the participants for
general employment and sustainable livelihoods.
Thus,
the youth, the poor and the vulnerable of society can benefit from
vocational/technical education. They stress that meeting the training needs of
the prospective trainees of the National Directorate of Employment is what
makes the training programme of the NDE relevant to the plights of the
unemployed. NDE training programmes are created and maintained to enable people
to make changes in their way of living and making a living. Thus, the NDE has a
laid down procedure for enlisting who actually needs its training programmes so
as to achieve the objectives of self-employment and employment generation in
Nigeria (Adebayo, 2006, Bright and Carlo, 2003, Coombs, 2003).
2.3 Government and Entrepreneurship Development
Initiatives
Over
the years, governments in Nigeria have shown concern over the issue of
entrepreneurship development and employment generation through small
enterprises otherwise known as Micro, Small and Medium Enterprises (MSMEs).
This is because government knows how important the subsector is to the
country’s economy.
Credible
stakeholders agree that a nurtured and well-structured MSME sector contributes
significantly to employment generation, wealth creation, poverty reduction and
sustainable economic growth and development. Efforts made earlier by government
to actualize MSME promotion failed until 2003 when the Small and Medium Scale
Industry Development Agency (Establishment) Act, enacted by the National
Assembly created the Small and Medium Industry Development Agency (SMIDA). The
National Assembly passed the SMIDA amendment bill in December 2004. The Act
changed the name of SMIDA to the Small and Medium Enterprises Development
Agency of Nigeria (SMEDAN).
The
Agency is today, the nation’s apex institution with the statutory
responsibility of facilitating the creation, resuscitation and stimulation of
the growth and development of the MSMEs sector of the Nigerian economy. The
establishment of SMEDAN is a giant stride by the Federal Government in
repositioning the sector and realigning it into mainstream of the Nigerian
economy. Government through the CBN launched the micro finance policy,
regulatory and supervisory framework for Nigeria in 2005.
The
policy provides the legal and regulatory framework for microfinance banking in
Nigeria. The objective is to create a sustainable and credible microfinance bank
capable of mobilizing and channelizing funds to the MSME subsector. Government
again came up with the Small and Medium Enterprises Equity Investment Scheme
(SMEEIS) initiative in response to its concerns and policy measure towards the
aggressive and radical transformation of the subsector through the provision of
adequate and cheaper funding.
With
SMEEIS commercial banks operating in Nigeria are required to set aside 10
percent of their profit after tax (PAT) for equity investment in small and
medium enterprises in Nigeria. The cumulative sum set aside by the banks under
the scheme as at December 2009 was N42bn. To promote entrepreneurship and
employment generation there are other government intervention programmes like
the N200billion Small and Medium Scale Enterprises Guarantee Scheme (SMECGS)
established in 2010 to fast track the development of the sector and set the
pace for the industrialization of the economy and increase access to credit by
small and medium enterprises and entrepreneurs.
Government
also came up with the Train to Work (TRATOW) initiative, which is targeted at
equipping young Nigerians with the skills required to establish and manage
their small businesses. The MSME subsector has been experiencing some skill
gaps necessary to grow the sector. This initiative is expected to close such
gaps and lead to the establishment of new enterprises and the expansion of
existing ones. Another model of promoting entrepreneurship by government is the
Youth Enterprise with Innovation in Nigeria (YOU WIN) programme.
You
Win programme is a collaboration of the Ministry of Finance, the Ministry of
Communication and the Ministry of Youth Development that aims at encouraging
aspiring, young entrepreneurs in Nigeria. This is in line with the Federal Government’s
drive to create more jobs for Nigerians. The programme is being implemented in
partnership with the private sector that is mandated to provide the funding
support. (MOMOH, 2012, AGBANUS, 2012, NDUMANYA, 2012).
The
Federal Government believes that patronizing made-in-Nigeria goods will boost
the nation’s manufacturing sector and by extension create jobs. It aims at
transforming the various sectors of the economy as well as providing the
enabling environment including infrastructure, with a view to ensuring the
nation’s socio-economic growth and development.
Lessons
from other countries studies show that SMEs in both advanced economies and
developing economies play key roles in employment generation. SMEs employ a
substantial number of people in developing countries across the globe. Few
examples are the clusters of handicraft enterprises in Vietnamese villages,
which are being transformed through the development of new products or more
advanced production techniques.
Researchers
also argue that Turkish growth in the last decade has relied heavily on SMEs,
whose dynamism derives from profitability and flexible labour markets. In view
of the importance of entrepreneurship in employment generation and economic
growth, the European Commission has launched a blueprint to unleash Europe’s
entrepreneurial potential and remove existing obstacles and to revolutionize
the culture of entrepreneurship in Europe. The European Entrepreneurship Action
Plan mainly involves encouraging member states to help increase investment
readiness of entrepreneurs and SMEs and help businesses to fully benefit from
the single market and access to markets in third world countries (ADEYEMI,
2014, UGOANI; NWAUBANI, 2014).
The
challenges of unemployment continue to vibrate around the globe. According to
Sami (2012) ILO warns that the global employment situation is “alarming”, and
contends that it is unlikely that the world economy will grow at a sufficient
pace over the next couple of years to both close the existing jobs deficit and
provide employment for the more than 80 million people expected to enter the
labour market during this period. ILO believes that what is needed is growth
and employment strategy.
And
to pursue this strategy, multinational bodies like UNIDO are giving attention
to entrepreneurship development and employment generation in developing
economies of the world. According to UNIDO Country Representative in Nigeria,
Ebonyi State Government had shown the will to move its people out of poverty, a
situation, which led to the inauguration of some projects such as the Abakaliki
Power Plant, the UNIDO Efficient Rice Mill, ICT Graduate Entrepreneurship
Training Gasification Plant, Village Solar Lighting, and Salt Processing (KORMAWA,
2012).
Government
claims to have created 17m jobs so far. The minister of Trade and Investment
states that there are over 17,284,681 sustainable enterprises in Nigeria. Each
entity is expected to employ at least one Nigerian, thus creating over 17
million jobs through the MSMEs. According to the minister, the government
recognizes that lack of access to market opportunities, lack of business
development skills and the lack of consistency in government policies were the
bane of MSMEs. What the government has done over the years in terms of
entrepreneurship development programmes epitomized by the NDE amounts to
nothing more than trying to formulate a sustainable “growth and employment”
strategy to wedge the tide of alarming unemployment growth rate.
3.
RESEARCH METHODOLOGY
The
survey research design was employed for the study. Surveys refer to an
investigation into certain things or events that exist or occur at the time of
the research and connected with some problem situations that is felt over a
wide area with a view to ascertaining what exists at the time of the research
in their natural settings. Surveys are not characterized by manipulations and
controls that dominate experimental studies. Populations involved in surveys
are usually large. Surveys are oriented towards ascertaining and establishing
the status quo, facts, or pieces of information at the time of the research and
presenting such facts as they are or going further to analyse. Therefore
surveys, could either be descriptive or analytical (OBODOEZE, 1996).
3.1
Population and sample
The
target population comprises of a cross section of self-employed people
clustered around Osisioma Local Government Area in Aba Zone. Aba Zone has the
highest number of entrepreneurs in South East Nigeria. The sample was selected
based on the simple random sampling method, while the sample size was
determined using the Yamane’s technique.
3.2
Data Collection Procedure
Primary
data were collected through a 20-item questionnaire designed along a 5-point
Likert-type scale with numeric values ranging from 1-5. Secondary data were
generated through books, journals, reports, gazettes, newspapers, etc. all the
questions raised and information generated were on the relevance of NDE,
entrepreneurship and employment generation. The two methods of data collection
were used so as to complement, supplement, and validate data through each
other. Data generated were organized, distilled and coded before they were
classified.
3.3
Data Analysis
Data
were analysed by Pearson’s product moment correlation using the Statistical
Package for the Social Sciences. The method was used in an attempt to determine
the degree of relationship between entrepreneurship development and employment
generation based on the NDE model.
4. RESULTS AND INTERPRETATION
CORRELATIONS
/VARIABLES=ED:
EG
/PRINT=ONETAIL NOSIG
/STATISTICS
DESCRIPTIVE
/MISSING=PAIRWISE.
Correlations
[DataSet0)
Table 1: Descriptive Statistics
Variables |
Mean |
Std. Deviation |
N |
Entrepreneurship development Employment generation |
.04 6.48 |
1.251 2.253 |
5 5 |
Table 2:
Correlations
Variables |
Entrepreneurship development |
Employment generation |
Entrepreneurship development
Pearson’s Correlation
Sig. (1-tailed)
N |
1 5 |
.901* .018 5 |
Employment generation
Pearson’s Correlation
Sig. (1-tailed)
N |
.901* .018 5 |
1 5 |
*
Correlation is significant at the 0.05 level (1-tailed).
Statistical
result in table 2 showed coefficient of correlation r = .901*, suggesting that
there is a “strong” positive relationship between entrepreneurship development
and employment generation. This result is splendid rather than an overstatement
as it is in tandem with the popular views in Nigeria.
For
example Adeyemi (2014) states: “Correspondingly, it is held that MSMEs account
for over 90 percent of Nigeria’s businesses. Some common examples of these
MSMEs are, canteens or restaurants, shops, complexes and plazas that we use for
our offices, relaxation joints, hotels, brothels, kiosks, sales outlets and a
host of other such places we dress up to go daily in order to make our ends
meet”. In view of this statistical result, the hypothesis that states that
entrepreneurship development has no relationship with employment generation was
rejected while the alternate hypothesis was accepted. This is the
objective of the study.
4.1
Discussion
The
NDE programme is consistent in the pursuit of various skill enhancement schemes
in realization of the fact that entrepreneurship development and innovation is
increasingly knowledge-and-skill-intensive. Fostering entrepreneurial
innovation requires not only highly knowledgeable, experienced and skilled
entrepreneurs but also highly skilled labour.
Thus,
educational policies and capacity building are important public policies for
entrepreneurship development. In realization of this situation, the National
Universities Commission (NUC) in 2011 mandated all universities in Nigeria to
mount B.Sc. programme in Entrepreneurship. The NUC sees a growing need for
entrepreneurship educational system.
According
to the NUC, government is cognizant of the necessity to imbue graduates with
the mind set of enterprise and innovativeness in order to generate and realize
new opportunities in the economy. Thus, integration of entrepreneurship studies
into university education will prepare the youths to be responsible
enterprising individuals who will become entrepreneurs or entrepreneurial
thinkers and contribute to economic development and sustainable communities.
The goal is to empower graduates, irrespective of their areas of
specialization, with skills that will enable them engage in income yielding
ventures if they are unable to secure paid employment.
It is
a re-orientation from the take-a-job mentality to the make-a-job mentality.
This approach is urgent because lack of employable skills is no doubt, a major
contributing factor to the problem of unemployment worldwide and especially in
Nigeria where about 42 percent of the total population of about 160m are
unemployed, and worse still, an estimated 67m physically fit youths are also
unemployed.
The
situation is so today because the educational policy adopted at
post-independence era in Nigeria places emphasis on liberal education rather
than acquisition of vocational skills, which prepare the individual for
alternative employment in the absence of government or any other type of paid
employment choices. The philosophy of NDE is self-enterprise, which emphasizes
self-employment and self-reliance in preference to wage employment. Europe
today believes that entrepreneurship education is key to sustainable economic
upsizing.
Studies
show that students who receive entrepreneurship education are not only more
likely to be employed, but also more likely to start their own companies. With
this in mind, the European Commission Plans to expose students to
entrepreneurship and, as a result, help create jobs throughout Europe.
Eurobarometer Entrepreneurship Survey shows that three quarters of Europeans
have never taken part in an entrepreneurship course thus, in order to exploit
the potential of entrepreneurship education and promote the entrepreneurship
2020 Action Plan, and ensure that the key competence in entrepreneurship is
embedded into curricula across primary, secondary, vocational, higher and adult
education before the end of 2015, and offer young people at least one practical
entrepreneurial experience before leaving compulsory education.
4.2 Recommendations
i.
Government should increase the funding of the NDE
programme. This will enable it enhance
the capacity of its skill centres for better training of participants.
ii.
NDE should spread to the different communities instead
of concentrating on the urban centres. This is needed so as to catch up with
more pupils and students in the rural areas for entrepreneurship skills
acquisition.
iii.
The healthy and active poor should be encouraged to
participate in NDE programmes. This will afford them the opportunity of
self-employment.
iv.
Government should mandate all the 774 local government
areas in Nigeria to create NDE farms in their areas. This will not only enhance
food production but also provide more employment in the agricultural sector.
v.
The NDE should explore the need for a MoU with their
main bankers for the finance of their accredited projects. This will help
participants in NDE Programmes who have the necessary skills and appetite to
start their own businesses.
4.3 Scope for further study
Further
study should examine the relationship of experience and small business
failures. This will help in finding a solution to the problem of cessation of
such enterprises shortly after taking off.
5. CONCLUSION
The
NDE remains one of the programmes of the Federal Government of Nigeria aimed at
employment generation. It has generated about 1.90m employment since inception
between 1987 and 1996, and also created 177,168 new employments in the last two
years. While unemployment is a subject we are all familiar with there is a
growing body of empirical evidence that skill acquisition and youth empowerment
and employment are about the surest ways of generating opportunities and
reducing unemployment.
The
reason behind setting up the Chukwuma Committee that produced the blueprint for
the introduction of the NDE was not unconnected with a decline in the fortunes
of the Nigerian economy, which resulted to a desperate and alarming rate of
unemployment. Thus, the NDE can safely be regarded as the catalyst of
employment generation in Nigeria.
Other
skill acquisition programmes like the entrepreneurship initiative of the NUC,
the European Commission Entrepreneurship 2020 Action Plan, and the Subsidy
Reinvestment and Empowerment Programme (SURE-P) Graduate Internship Scheme
(GIS) reflect the common features of the NDE. For example, in 2014 over 150,000
graduates registered for the SURE-P Scheme across Nigeria while over 7,000
firms signed up to take in interns. 962 interns successfully took part in the
programme.
In
furtherance of its efforts towards tackling unemployment, addressing issues of
poverty and vulnerability and promoting inclusive finance at the grass-root
levels, the NDE tailored a new scheme called Special Micro Empowerment Scheme
(SMES), which is aimed at promoting social inclusion and job creation. The
micro enterprises being promoted include: Akara and kunu making
potatoes/plantain frying, vegetable oil extraction, pure water/beverages sales,
vegetable/fruits sales, shoemaking, shining among other vocations.
Today
MSMEs like these account for about 99.6 percent of registered businesses in
Nigeria by which about 63 percent of the labour force earn a living. About 35.7
percent of the total sales and value added in the manufacturing sector come
from the MSMEs as well. To reduce the problems of low finance in the MSMEs
sector the NDE is promoting financial inclusion to ensure that efforts at
employment generation are not hindered. With r, = .90, the study found that NDE
contributes to the creation of employment and wealth and also provides the
Nigerian economy with a continuous supply of ideas, skills, and innovations
necessary for the efficient management of enterprises and scarce resources. The
NDEs one million job creation programme remains a wonderful idea in employment
generation.
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